Folks,
Market Observations for the Week: The SPX gave us a gap-down open after the PCE inflation report and then rallied back to fill the opening gap. Still, we are at a do-or-die time in the market – breaking 3827.67 would start a washout into 7/5 next week. How we trade going into the holiday weekend tomorrow is key – the PMI and ISM reports early Friday could be a catalyst. The PCE report came in stronger than anticipated and the SPX did close lower for the day. Crude oil spiked into the 6/28-6/29 New Moon Timing Window, tested $114, and then reversed down today. Crude oil tested and that is bearish. Our TRIN-5 indicator became increasingly oversold at 7.47 and this could be a sign that the SPX could wash out into 7/5. Bitcoin broke through 20000 support and tested 18500 before rebounding. Gold made lows for the week by testing $1800 early Thursday in the New Moon Timing Window. The USD tested 105.54 Thursday and then gave us a sharp move down.
6/30/22 (Commentary for Thursday) The SPX gave us a gap-down open again today and may be setting up for a wash out down into July 5. The ISM and PMI reports should provide an early catalyst for trading. Our TRIN-5 indicator continues very oversold at 7.48 and this could be arguing for a washout into 7/5 – it is possible that on 6/28, the 55-day Fibonacci step out from 5/4 gave us an important high at 3946 early Tuesday. We got a convincing break below Wednesday’s low at SPX 3798 today and that is bearish for lower prices into 7/20. Bitcoin broke through 20000 Thursday and rebounded after testing 18500. Crude oil continued its spike into Tuesday’s New Moon Timing Window and tested $114 on Wednesday before reversing down – we have viewed this week’s rally in crude oil as CORRECTIVE and are looking for lows below $101.53. Our bias remains that crude oil is in a C-Wave down from the B-Wave top at $123.57 on 6/14 and that it could test $87-$90. Gold continued lower in today’s New Moon Timing Window and tested $1800 overnight. The USD tested its R2 pivot resistance at 105.56 before reversing down sharply. Our current holdings are ~80% cash and ~20% in physical gold/silver/platinum.
Big Picture on Stocks (UPDATED) – The SPX took out 3798 and looks bearish for a possible washout into 7/5. Longer term, the SPX could give us a 20%-50% correction by spring 2023 as the 20-yr cycle low bottoms and the US economy slows to a recession. We favor a high percentage of cash for capital preservation.
Big Picture on PMs (UPDATED) – Gold stocks are underperforming gold here and that may relegate gold to a choppy sideways trading range in the near term. Weakly trending gold stocks may imply more weakness in the SPX.
- Stocks – The SPX gapped down after the PCE inflation reports and managed to fill the opening gap but closed weak on Thursday’s close.
- Gold – Gold continued lower to test $1800 overnight Thursday as the USD roared back to test the 105.56 level before reversing down.
- Silver – Silver took out $20.00 overnight and looks weak.
- Bonds – Bonds continued higher today and tested 138’29 as the 10-yr US rate broke below 3.0%.
- Crude Oil – Crude oil spiked into today’s New Moon Timing Window and tested $114 before reversing down.
- Dollar Index – The USD broke out of its triangle to test its R2 pivot resistance at 105.67 before reversing down.
TURNING POINT DAY
The turn window for this week is 6/27-6/28.
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